Mortgage Observer

Mezzanine Lending: the Stuyvesant Town Saga

Stuyvesant Town/Peter Cooper Village.

It’s an oft-told story, but to gloss over it would be to minimize a protracted tug of war that has been the most influential series of lawsuits for U.S. mezzanine lenders in the last decade.

When Tishman Speyer and BlackRock bought Stuyvesant Town-Peter Cooper Village in their notorious, record-breaking 2006 deal, they borrowed $4.4 billion of the $6.3 billion price tag. Fast-forward a few years (plus one recession and a legal defeat), and Tishman was in deep trouble.

This sent the junior and senior lenders into years of legal infighting over control of the largest housing complex in the U.S.—a fight that has become legend for its messiness (an entire book was written on the subject) and has kept lenders on their toes as they negotiate loan contracts ever since. Read More

Lease Beat

Consignment Shop Second Time Around Leases 1,213 Square Feet in Stuy Town

Stuy Town as seen from First Avenue

The consignment store Second Time Around signed a long-term lease for 1,213 square feet of Stuyvesant Town real estate at 334 First Avenue.

Scott Galin and Darell Handler of Handler Real Estate Organization represented the tenant. Bruce Spiegel and William Bergman of Rose Associates, Inc. represented the landlord, ST Owner, LP. Messrs. Galin and Handler said asking rent was $120 per square foot. Read More

The Sit-Down

The Final Word: Charles Bagli on “Other People’s Money”


The New York Times’s Charles Bagli’s new book Other People’s Money tackles the housing crisis and 2010 collapse of the Stuyvesant Town-Peter Cooper Village deal. Set for release April 4, the book takes readers inside the bidding war and the eventual loss of billions of dollars of investor money. Mr. Bagli, a former reporter at The New York Observer, spoke with The Commercial Observer about the book, how the Stuy Town deal defined an era, and whether or not investors and the industry learned a lesson.

The Commercial Observer: What is the significance of this story?

Mr. Bagli: For me—just my own thinking—it was a critical moment. Here we are in the midst of another real estate boom, and it just really highlighted the fact that these guys that used to go for the “glass and brass” are out there scooping up what some people would call “meat and potatoes,” the brick tenements. You sort of step back and say: ‘Whoa, what’s this about?’ Like I say in the book, I think Stuyvesant Town, in a way, is for New Yorkers an iconic place, not dissimilar from the Empire State Building or Rockefeller Center.

Read More


Head of the Class: Teachers Retirement Fund TIAA-CREF Making Waves in New York

8 Spruce Street

Though not a traditional owner-operator, TIAA-CREF has begun to draw the attention of the real estate industry in recent months for a bevy of deals, including its acquisition of a stake in the Frank Gehry-designed building at 8 Spruce Street and a joint venture with Norges Bank Investment Management.

The asset management firm’s steady persistence in the real estate market during the downturn has led to a realization of gains, and recent deals could lead to the redeployment of capital in key markets going forward, said analysts familiar with the firm’s strategy going into 2013.

“TIAA is one of the investors that was pretty active in the depths of the market in 2009 and 2010, and some of those investments have turned into significant home runs,” said Dan Fasulo, managing director and head of research at Real Capital Analytics. Read More

Mortgage Observer

Bank of America: Off to the Races

Steve Kenny.

Training for a marathon while working a full-time job would be a challenge for anyone. But working up to that 26.2-mile mark while simultaneously doing your part to contribute to a nation-wide book of transactions that over the last 18 to 20 months included the origination of more than $20 billion in commercial real estate loans might pose its own set of challenges.

Steve Kenny, Bank of America’s commercial real estate banking executive for New York and New Jersey, is doing just that, though. And when he takes to the starting line for the ING New York City Marathon November 4 to set out on a course that will take him through all the five boroughs, the challenges he’ll face will in many ways be business as usual. Read More

Management Shifts

Rose Associates Out, CW Financial Subsidiary In, at Stuyvestant Town


Rose Associates has been ousted as the property managers of the controversial Stuyvesant Town and Peter Cooper Village complex, according to reports.

CW Capital Asset Management, a subsidiary of CW Financial which took over the complex in 2010, has tapped CompassRock Real Estate, also a subsidiary of CW Financial, as its new property manger, effective September 1, 2012. Read More

Legal Matters

Mitchell-Lama Building Wins Right to Convert Units to Market Rate


The State Appellate Court ruled today that Independence Plaza, a large residential rental building that had been in the Mitchell-Lama program had the right to convert its units to market rate when the 1,300-unit property left the program in 2004, despite the fact the building had been in the city’s J-51 program.

The outcome, which overrules a previous decision, is a victory for Stellar Management, owner of the Tribeca complex. Read More

Stuy Town Creditors Now Battling About Grammar

Looks like things have gotten so bad in the fight between Stuyvesant Town creditors CW Capital and Pershing Square/Winthrop Realty Trust (PSW), that they’re now fighting over punctuation.

From the latest brief in the ongoing fight, filed yesterday by CW Capital:

Without any explanation, PSW injects the doctrine of last antecedent to convince this Read More

Following the Money

Stuy Town Financing, Made Lucid

For those who find themselves confused by the mess that the fight over Stuyvesant Town has become, with different layers of creditors warring in court, someone’s taken the time to make it crystal clear in a chart: 

From Work

Still confused?

While perhaps not the intended effect, the tangle that is the chart illustrates Read More